Falling off the Fiscal Cliff: 5 Things You Need to Know

Now that the election is over, policymakers and the media have refocused their attention on the looming budget battles in Washington. In January, a variety of tax increases and spending cuts will go into effect unless Congress and President Barack Obama agree on a plan to avoid what has been deemed “the fiscal cliff.” As the country braces for another fiscal showdown in the nation’s capitol, here are five things you need to know on the issue likely to dominate the news over the next several months.

The fiscal cliff is a manufactured crisis that reveals Washington’s dysfunction – The fiscal cliff involves tax increases and spending cuts that would affect nearly everyone. An analysis from the Congressional Budget Office predicts that going over the cliff would put the economy back into recession. Sadly, this crisis was a monster created Congress’ inaction and was entirely avoidable.

Congress passed the Budget Control Act in 2011, which raised the debt ceiling but also mandated reducing the national deficit by more than a trillion dollars. A bipartisan “supercommittee” was created to find the needed cuts and new revenues but the lawmakers on the committee failed to reach a deal. Unless Congress passes legislation to achieve the mandated deficit reduction in the Budget Control Act or alters what is required under that law, automatic spending cuts and tax increases (called “sequester”) will automatically go into effect in January. The sequester was designed to be unacceptable to both parties, thus providing an incentive for legislators to reach a bipartisan agreement, but because of Congress’ intransigence this admittedly bad policy may become law.

This is an unnecessary crisis created and exacerbated by Washington’s polarized culture. It represents a failure of leadership in Congress where political ideology trumped the common good.

The poor have a lot to lose – The silver lining of the fiscal cliff is that many programs serving poor and vulnerable people are exempted from the automatic cuts sequestered in the Budget Control Act. However, as Republicans and Democrats again come to the negotiating table in an attempt to avert the fiscal cliff programs that serve the poor are likely to be targeted for cuts. Special interests are walking the halls of Congress advocating for their priorities but few are standing up for low-income Americans. The Circle of Protection (in which Sojourners participates) is one of the few groups advocating to protect the poor from devastating budget cuts. The nation’s budget problems should not be solved by increasing the burden on those who are already suffering.

Budgets are moral documents – This is a well-known mantra within the faith community but both elected officials and the media need to be constantly reminded of it. Both policymakers and journalists have focused on the economic consequences of the fiscal cliff and the various proposals to avoid it. Many pundits have discussed the politics involved in finding a deficit reduction compromise and the political calculus being done by the various actors whose support is needed to reach an agreement. Yet the consequences of different options for the lives of everyday Americans are ignored. Determining a nation’s spending priorities is fundamentally a question of priorities and values. Will we protect tax breaks for the wealthy or protect programs for the poor and vulnerable? Will we get serious about ending corporate welfare or reduce the deficit by curtailing tax credits that help lift people out of poverty? These aren’t just economic or political questions. These are fundamentally moral issues and should be addressed as such.

Common ground is needed – While this particular crisis resulted from a failure of leadership in Congress, the long-term fiscal challenges facing the country are quite real. Finding solutions will require people from both parties to find common ground. The path forward needs to comprehensively address the nation’s economic struggles by paying down the deficit over the long-term, growing the economy, and creating jobs. Any solution will require a balance between spending cuts and revenue increases. It will require bipartisan support to pass through Congress. Given the complexity and size of the issue, any attempt to address it will involve political risk and both parties must be invested in the outcome. A bipartisan approach will ensure neither party can bludgeon the other for attempting to address this issue responsibly.

Your voice can make a difference – Your representatives and senators really do listen to feedback from their constituents. They need to know the people who elected them care about this issue and how it will affect poor people. Lobbyists are already trying to influence Congress’ thinking and protect their own interests. This is a major issue that will influence federal spending for at least the next 10 years. Please think about ways you can advocate for the least of these. Consider writing a letter-to-the-editor of your local paper. Write or call your e-mail your representative in Congress today. You don’t need to be a policy expert because the message is simple: any agreement on deficit reduction should not increase poverty. Programs that serve the poor must be protected from cuts.

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